<DIV>Brokerage report: Voloshin resignation set to see more hawkish Russian regime<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o:p></o:p></DIV> The head of the presidential administration Alexander Voloshin has reportedly tendered his resignation over the arrest of Yukos CEO Mikhail Khodorkovsky, though negotiations on whether it will be accepted by President Vladimir Putin were apparently still taking place last night.<o:p></o:p> Voloshin, 47, has been the head of the Kremlin since March 1999, a position that officially ranks third in the Russian power hierarchy, after the president and prime minister; though Voloshin has long been seen as <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" /><st1:country-region><st1:place>Russia</st1:place></st1:country-region>’s gray cardinal, deciding the majority of sensitive political issues on Putin’s behalf, and in fact the second most powerful political figure in the country.<o:p></o:p> Various news sources said Voloshin tendered his resignation to Putin immediately after Khodorkovsky’s arrest on Saturday, then withdrew it, and that negotiations were now continuing; he had also reportedly threatened to resign after the arrest of Yukos principal shareholder Platon Lebedev on July 2. Voloshin, a machiavellian figure with a brilliant political mind, is the leading representative (ahead of even Prime Minister Mikhail Kasyanov) of the Yeltsin-era Family clique, a group of super-rich busi-nessman, friends and relatives of former President Boris Yeltsin, who dominated <st1:country-region><st1:place>Russia</st1:place></st1:country-region>’s politicaland economic life in the 1990s.<o:p></o:p> Voloshin’s resignation would effectively mean the surrender of the Yeltsin group to the other key faction in the Kremlin, the <st1:City><st1:place>St. Petersburg</st1:place></st1:City> group, made up of former KGB officials from <st1:country-region><st1:place>Russia</st1:place></st1:country-region>’s second city who served with Putin in the Soviet era, and whom he brought to the presidential administration upon assuming office in May 2000. The St. Petersburg KGB group has increasingly been flexing its muscle in business and politics of late and officials from this faction are widely believed to have been driving the attacks on Khodorkovsky and his closest  associates.  <o:p></o:p> Throughout his term as president Putin has sought to balance the interests of the Yeltsin and St. <st1:City><st1:place>Petersburg</st1:place></st1:City> groups, playing them off against one another and retaining his independence; most Russian media are interpreting the loss of Voloshin as Putin becoming hostage to his former secret service colleagues.<o:p></o:p> Voloshin was initially installed as chief of the presidential administration at the behest of now-exiled oligarch Boris Berezovsky, with whom he worked closely in the 1990s to build the oligarch’s empire.<o:p></o:p> However, Voloshin sided with Putin after the latter’s election and was the central figure in smoothing the path to Berezovsky’s exile rather than jailing, as most observers believe he deserved. Voloshin also played a central role in the formation of the Unity Party, the parliamentary vehicle to<o:p></o:p> support then-prime minister <st1:City><st1:place>Vladimir</st1:place></st1:City> Putin ahead of the Dec. 1999 parliamentary elections, and was expected to be the key strategist for United Russia in the current Duma campaign. His loss may thus deal a blow to the prospects of United Russia as he has perhaps the best political mind in <st1:country-region><st1:place>Russia </st1:place></st1:country-region>today, and is certainly streaks ahead of anyone else in the party’s leadership group.<o:p></o:p>  <hr SIZE=1> Do you Yahoo!? Exclusive Video Premiere - <a href="http://launch.yahoo.com/video/?1093432&fs=1&redirectURL=http://launch.yahoo.com/promos/britneyspears/">Britney Spears</a>